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Exhibit 99.1
BEACON CAPITAL PARTNERS, INC.
One Federal Street
Boston, Massachusetts 02110
(617) 457-0400
Contact: Randy J. Parker FOR IMMEDIATE RELEASE
Chief Financial Officer
BEACON CAPITAL PARTNERS REPORTS SECOND QUARTER RESULTS
AND PROVIDES ESTIMATE OF NET ASSET VALUE
BOSTON, August 16, 2000 - Beacon Capital Partners, Inc. (BCP) today announced
results for the second quarter and the first half ended June 30, 2000.
Funds from operations (FFO) in the second quarter totaled $4,527,000 or 22 cents
per share, an increase of 1.1 percent compared with $4,476,000 or 21 cents per
share in the second quarter of 1999. Revenues were $12,382,000, up 28.8 percent
from $9,611,000. The weighted average number of common shares outstanding
totaled 20,973,000 compared with 20,974,000 a year earlier.
First half FFO totaled $13,041,000 or 62 cents per share, an increase of 54.7
percent compared with FFO of $8,432,000 or 40 cents per share in the first half
of 1999. Revenues amounted to $31,931,000 versus $19,056,000, an increase of
67.6 percent. The weighted average number of common shares outstanding in the
six-month period totaled 20,973,000 compared with 20,974,000 a year earlier.
As of June 30, BCP's portfolio consisted of 2.7 million square feet of office
and industrial space, comprising a total of 41 buildings. The portfolio was 91
percent leased. In addition, the Company had approximately 840,000 square feet
of projects under development.
Highlights of the second quarter included:
* The Board of Directors declared a special dividend of $3.00 per share, payable
June 28, 2000, to shareholders of record as of June 16, 2000. The dividend was a
distribution of excess cash as a result of various property sales and
re-financings.
* The Stock Repurchase Program was extended, and authorizes the repurchase of up
to $30 million of the Company's common shares over the next six months. Under
the initial program, which commenced January 28, 2000, the Company successfully
purchased approximately 1.8 million shares of its common stock and various
voting trust interests, or 8.4% of the common shares outstanding. The current
program expires January 28, 2001.
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BEACON CAPITAL RESULTS (2)
* Sale of 215 First Street, Cambridge, MA, for $68.0 million. The 306,000 square
foot property was part of The Athenaeum Portfolio, acquired in May 1998. After
repayment of debt, the Company shared net proceeds of approximately $16 million
with its joint venture partner.
* Sale of the 475,000 square foot Draper Building, Cambridge, MA, for $72.5
million. The purchaser was the property's sole tenant, The Charles Stark Draper
Laboratory, Inc. After repayment of debt, the Company realized net proceeds from
the sale of approximately $40 million.
* Acceleration of the development program at Technology Square to meet
continuing strong demand in Cambridge, MA. The first building (175,000 square
feet) is scheduled for completion in the spring of 2001, and is experiencing
strong leasing activity. The timetable for the next two buildings has been
accelerated, and construction is expected to begin by late August.
* The conversion of two warehouse buildings at Fort Point Place, Boston, MA, was
substantially complete by the end of the second quarter, resulting in 120 new
loft condominiums becoming available for occupancy. The residential market in
Boston continues to be strong, and to date we have executed purchase and sale
agreements for more than 50 units.
* The sale of 233 Fremont Street in San Francisco, CA to Charles Schwab & Co.,
Inc. for $146 million (plus remaining development costs) was executed by Beacon
Capital Strategic Partners, L.P., the real estate limited partnership formed by
BCP. A $70 million distribution was made to the Partners in June, of which
Beacon Capital Partners received approximately $25 million. Because no equity
capital had been drawn since the closing of the fund, Beacon Capital Partners as
General Partner, was entitled to a 20% "promote" in addition to its 20% pro-rata
share of the proceeds.
* Juniper Networks, Inc. took occupancy of the first phase (144,000 square feet)
of the Mathilda Research Centre, Sunnyvale, CA, on June 1, 2000. The second
phase (123,000 square feet), which will also be occupied by Juniper Networks, is
scheduled to be completed by April, 2001.
* Leasing activity is strong at Millennium Tower, currently under development in
Seattle, WA. Leases that have been executed or that are pending represent over
50% of the 180,000 square feet of office space available. Tenants include a
major financial services firm and a Seattle-based law firm. Occupancy is
scheduled for the first quarter of 2001.
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BEACON CAPITAL RESULTS (3)
* CO Space, Inc., a company in which BCP and its affiliates held an 18.2
percent interest, was purchased by InterNAP Network Services Corp.
(Nasdaq:INAP) in a stock transaction valued at approximately $248 million.
BCP originally invested an aggregate of approximately $8 million in CO Space
in November 1999. On June 20, 2000, the effective date of the acquisition,
the CO Space investment was converted to restricted common stock in InterNAP,
Inc. valued at approximately $45 million. The stock is held in a voting trust
subject to certain restrictions.
* The Company held its Annual Meeting on May 10, 2000. All matters contained in
the Proxy received approval by the Company's shareholders, including
ratification of the revised long-term incentive compensation plan.
ESTIMATE OF NET ASSET VALUE
As noted in our recent Proxy Statement (distributed on April 10, 2000), the
Company intends to provide, at least annually, an estimate of net asset value
per share for Beacon Capital Partners. As of June 30, 2000 the Company estimates
that the value of Beacon Capital Partners is approximately $18.00 - $20.00 per
share. This value excludes the three voting trusts that have been established to
hold the investments in Wyndham, Cypress Communications, and CO Space. In
addition, this valuation does not include the $3.00 special dividend
(distributed 6/28/00) that resulted from various property sales and
re-financings. The methodology used in valuing real estate assets attempts to
determine the current market value for properties. This value also does not
reflect any payment that may be due to management under the long-term incentive
plan.
The Company is not likely to provide regular updated information regarding this
estimate, although it will endeavor to update this information at least
annually. Therefore, the Company's stockholders should not rely on the continued
accuracy of this estimate. There are many factors that the Company considered in
making this good faith determination of its per share net asset value, any of
which could change materially at any time. In addition, this estimate is by its
nature only a prediction of value. There is no assurance that the Company can
realize this value in connection with an orderly liquidation of the Company's
assets.
Beacon Capital Partners, Inc. is a real estate investment company that was
formed in January 1998 by Alan M. Leventhal, Chairman and CEO and Lionel P.
Fortin, President and COO. The company is based in Boston, Massachusetts, with a
regional office in Los Angeles.
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BEACON CAPITAL RESULTS (4)
Certain matters discussed in this press release may constitute forward-looking
statements within the meaning of the Federal securities law. Although Beacon
Capital Partners, Inc. believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, the Company
can give no assurance that its expectations will be achieved. Factors that could
cause actual results to differ materially from current expectations include
general economic conditions, local real estate conditions, timely release of
occupied square footage upon expiration, interest rates, availability of equity
and debt financing and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission.
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BEACON CAPITAL PARTNERS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except for per share amounts)
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
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(Unaudited)
<S> <C> <C>
ASSETS
Real Estate:
Land $ 35,257 $ 52,182
Buildings, improvements and equipment 224,440 216,967
--------------- ---------------
259,697 269,149
Less accumulated depreciation 8,666 7,025
--------------- ---------------
251,031 262,124
Deferred financing and leasing costs, net of accumulated
amortization of $759 and $434, respectively 2,885 3,085
Cash and cash equivalents 83,482 76,927
Restricted cash 611 1,203
Accounts receivable, net 4,423 3,393
Deferred rent receivable 1,550 783
Other assets 503 1,905
Investments in partnership, joint ventures and corporations 98,110 163,677
--------------- ---------------
Total assets $ 442,595 $ 513,097
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 31,019 $ 31,172
Note payable - interim financing 97,830 122,500
Accounts payable and accrued expenses 14,689 15,209
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Total liabilities 143,538 168,881
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Commitments and contingencies -- --
Minority interest in consolidated partnership 38,199 43,639
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Stockholders' equity:
Preferred stock; $.01 par value, 200,000,000 shares
authorized, none issued or outstanding -- --
Excess stock; $.01 par value, 250,000,000 shares
authorized, none issued or outstanding -- --
Common stock; $.01 par value, 500,000,000 shares
authorized, 20,972,592 and 20,973,932 shares
issued and outstanding, respectively 210 210
Additional paid-in capital 389,502 389,520
Cumulative net income 68,581 12,019
Cumulative dividends (197,435) (101,172)
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Total stockholders' equity 260,858 300,577
--------------- ---------------
Total liabilities and stockholders' equity $ 442,595 $ 513,097
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</TABLE>
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BEACON CAPITAL PARTNERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Revenues:
Rental income $ 8,524 $ 4,715 $ 16,940 $ 9,877
Reimbursement of operating expenses and real
estate taxes 374 788 690 1,591
Equity in earnings of partnership and joint ventures 1,120 1,147 3,972 2,401
Interest and dividend income 2,039 2,799 3,334 4,784
Other income 325 162 6,995 403
----------------- ----------------- --------------- ---------------
Total revenues 12,382 9,611 31,931 19,056
----------------- ----------------- --------------- ---------------
Expenses:
Property operating 2,510 1,388 4,764 2,747
Real estate taxes 1,190 1,236 2,439 2,299
General and administrative 2,837 2,341 5,764 4,923
Affiliate formation expenses - - 2,054 -
Interest expense 844 25 2,484 467
Depreciation and amortization 1,936 1,192 3,801 2,316
----------------- ----------------- --------------- ---------------
Total expenses 9,317 6,182 21,306 12,752
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Income before gains on sales of real estate, minority
interest and extraordinary items 3,065 3,429 10,625 6,304
Gains on sales of real estate 58,537 - 58,537 -
----------------- ----------------- --------------- ---------------
Income before minority interest and extraordinary items 61,602 3,429 69,162 6,304
Minority interest in consolidated partnership (7,149) (398) (8,026) (732)
----------------- ----------------- --------------- ---------------
Income before extraordinary items 54,453 3,031 61,136 5,572
Extraordinary items, net of minority interest (4,562) - (4,574) -
----------------- ----------------- --------------- ---------------
Net income $ 49,891 $ 3,031 $ 56,562 $ 5,572
================= ================= =============== ===============
Income before extraordinary items per common share
basic and diluted $ 2.60 $ 0.14 $ 2.92 $ 0.27
Extraordinary items per common share - basic and
diluted (0.22) - (0.22) -
----------------- ----------------- --------------- ---------------
Net income per common share - basic and diluted $ 2.38 $ 0.14 $ 2.70 $ 0.27
================= ================= =============== ===============
Weighted average number of common shares
outstanding (in thousands) 20,973 20,974 20,973 20,974
================= ================= =============== ===============
FFO CALCULATION
Income before gains on sales of real estate, minority
interest and extraordinary items $ 3,065 $ 3,429 $ 10,625 $ 6,304
Add real estate related depreciation and amortization:
Consolidated entities 1,532 1,116 3,051 2,203
Joint venture entities 524 518 1,076 1,031
----------------- ----------------- --------------- ---------------
Funds from operations before minority interest 5,121 5,063 14,752 9,538
Company share of consolidated partnership 88.39% 88.40% 88.40% 88.40%
----------------- ----------------- --------------- ---------------
Company funds from operations $ 4,527 $ 4,476 $ 13,041 $ 8,432
----------------- ----------------- --------------- ---------------
Funds from operations per common share $ 0.22 $ 0.21 $ 0.62 $ 0.40
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